Contract management offers companies risk reduction and greater profitability

One of the biggest challenges in the Purchasing area is ensuring that the company manages its contracts well. If the established items are not managed well, they can affect the profitability of the business and generate losses for the organization.

Companies’ purchasing agreements are becoming increasingly complex, such as increased bureaucracy in the supply chain, in addition to unpredictable demands. Factors such as these cause buyers and suppliers to give up on adhering to laws related to the integrity and transparency of their companies. These difficulties lead to supply interruptions and a drop in the quality of the service delivered. Therefore, any practice that is not aligned with the company’s values ​​can have a negative effect on the corporation and everyone involved in the process.

A 2017 Aberdeen survey found that 44% of companies are looking for more visibility into their contracts and 40% would like to reduce risk with their suppliers. In addition, 37% of organizations want to have more compliance in their agreements with suppliers and 34% want access to supplier performance.

According to Daniel Hsu, head of Mercado Eletrônico’s CLM business unit, a lack of management and control of processes can lead to delays in negotiations, a lack of governance, and financial losses. “To avoid risks, the first step is to have good Contract Life Cycle Management (CLM). Problems such as a decentralized contract base, difficulty in adapting to compliance rules, and losses due to lack of control over renegotiation deadlines can be solved with CLM.”

Mercado Eletrônico offers the Contract Lifecycle Management solution, which assists, monitors and organizes the agreements made by the company with suppliers, partners and customers, with a focus on cost reduction. In addition, it helps to centralize all negotiations in a single environment, bringing more agility and governance to the preparation of contracts.

Pillars of efficient contract management

Mercado Eletrônico's CLM solution provides companies with clarity on the basis of contracts, which allows full access to data in real time for more assertive decision-making. The tool was designed so that companies can achieve the four most important pillars in contract management: savings, agility, collaboration and governance.

CLM technology also guarantees validity control, prevents increases in acquisition costs due to contract breaches, monitors real savings obtained through the use of contracts, offers electronic signatures and a mobile solution, facilitating the monitoring of activities, anywhere.

“Contract management plays a fundamental role in a company’s planning. Through ongoing process supervision, it is possible to generate savings in the purchase of products, contracting of services and costs, and even in administrative procedures,” adds Hsu.

Meet Electronic Market CLM solution and revolutionize your company's contract management!

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